Tuesday, April 24, 2007

This was a good question in an email and I thought you may wish to read my response.DEAR MARKTHANKS FOR SENDING THE VALUABLE INFORMATION ON REAL ESTATE. AT WHAT RATE PERCENTAGE DO YOU THINK THE SINGLE HOMES' PRICES WILL INCREASE ANNUALLY IN THE NEXT FIVE YEARS IN MISSISSAUGA ?. I AM EXPECTING AN HONEST REPLY ON THIS.THANKS .Arun B.

Hello Arun B.,

Thank you for your real estate inquiry. In my opinion, nobody can predict what the markets will do over that period of time. I can tell you that the market will remain strong for at least the next 1 to 2 months. There are changes in our market. It is not 'on fire' the way it was for the past few years. If you look at this graph, you will see that the market has only continued to climb at a high rate of about 6% to 8% per year since 1995

No matter what anyone has told you, the west GTA market has slowed compared to recent years, it's still a good market but not booming the way it way. People who bought new homes in any year from about 1998 could resell the home for a large profit by the time they closed. This is no longer the case. People who bought new homes last year and have just closed are having difficulty breaking even. This is in spite of the fact that we are at the 'high time' of the year.

Another observation. For the first time that I can ever remember, and I have been tracking prices since I got into the business in 1987, the March average price was lower than the February average price. This is unheard of. For the past 20 years March prices were higher than February, except this year. The price dropped 1%, not a large amount, but it dropped rather than increase. This too is significant and indicated our market is not booming any more. This could change in the future, but for the near future prices are likely to stay about the same as they are now.

My 'best guess' for the long term is that we will see increases in year over year prices, but they will be about 2 to 3% per year and not the 5 to 8% that we have seen in years over the last decade. There will always be pockets that will outperform the average prices and this too is one of the keys when buying real estate. It is still all about location.

Please let me know if you have any other questions or if there is anything else I can help you with.

Thank you again for contacting me and I will do my best to help you with your real estate needs,